The U.S. Securities and Exchange Commission (SEC) has approved Ethereum exchange-traded funds (ETFs) from both Grayscale and VanEck, marking a pivotal moment for cryptocurrency investments in the U.S. regulatory space. This decision allows for greater access to Ethereum (ETH) for both institutional and retail investors.
VanEck’s Ethereum ETF received its “Notice of Effectiveness” on July 22, 2024, after over three years of navigating the regulatory process. This approval followed multiple filings and amendments to comply with SEC rules, such as the S-1 registration form and the Rule 424(b)(3) prospectus.
The crypto ETF sector saw a wave of approvals, with other major firms like BlackRock, Fidelity, and Bitwise also receiving the green light to start trading their Ether ETFs on July 23. The SEC’s decision underscores the growing acceptance of crypto investment products in the broader financial markets.
Grayscale’s Ethereum ETFs, the Grayscale Ethereum Trust (ETHE) and the Grayscale Ethereum Mini Trust, launched on NYSE Arca on July 23, 2024, following their own approval that morning. ETHE, which has $9.19 billion in assets, charges a 2.5% management fee, while the Ethereum Mini Trust has waived fees for the first six months, later imposing a 0.15% fee once assets hit $2 billion.
Grayscale’s managing director, John Hoffman, emphasized the innovative potential of Ethereum, especially in decentralized finance (DeFi), while noting that these ETFs eliminate the need for direct Ether management by investors.
As part of the launch preparations, Grayscale transferred over $1 billion in Ether to Coinbase to facilitate the new products and protect investors from capital gains taxes.
Analysts, including those from Bloomberg, anticipate these ETFs could lead to a significant rise in Ethereum’s value, with some predicting that the price might reach over $5,000 by the end of 2024. At the time of writing, Ethereum was trading at $3,513.09, up from a recent low of $3,384 on July 19.
This move reflects a significant shift in how digital assets are being regulated and incorporated into mainstream finance.
